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Senator did nothing wrong by accepting businessman’s loans, lawyer says

Senator Mac Harb leaves the Parliament Buildings after attending a meeting of the Senate Internal Economy, Budgets and Administration committee on Parliament Hill Thurday May 9, 2013 in Ottawa.

Sean Kilpatrick/THE CANADIAN PRESS

Senator Mac Harb has mortgaged his home and other properties to the tune of $230,000 to pay for his legal fight against the Senate – and his lawyer says he has reported every loan to the Senate Ethics Officer.

Mr. Harb, a former Liberal MP and senator who now sits as an independent, has been accused by a Senate committee of inappropriately claiming up to $231,649 in expenses between 2005 and 2012, and the RCMP is now looking into his past expense claims.

Since May, he has borrowed $230,000 from Ottawa businessman Brian Karam, mortgaging his home and two other properties to take out four loans, so that he can pay for a legal battle, said his lawyer, Paul Champ.

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But Mr. Champ said that Mr. Harb followed Senate rules and "promptly" reported each loan.

"All of those loans were reported in accordance with Senate rules, promptly. The mortgages themselves were a matter of public record," Mr. Champ said.

Mr. Champ said it's "patently ridiculous" to suggest that the loans create a conflict with government business.

A story by The Canadian Press wire service, published by The Globe and Mail, reported that Mr. Harb had borrowed $55,000 from Mr. Karam, who has commercial-leasing business interests with the government. It also noted that Section 121 of the Criminal Code prohibits an official from accepting a loan in connection with government business.

"It's just patently ridiculous to suggest that Senator Harb is a part of the Harper government and could in any way influence commercial leasing decisions by the Harper government," Mr. Champ said. "It's really spin."

One of the loans was contracted so that Senator Harb could pay back $50,000 in claimed expenses, at the demand of the Senate – something Mr. Harb "did under protest, and which he's challenging in court," Mr. Champ said. The other loans are to finance his legal case, as Mr. Harb has vowed to fight allegations that he claimed expenses inappropriately.

The loans from Mr. Karam are "a commercial deal," Mr. Champ said. "The loans are secured by mortgages, at commercial rates."

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The source of funds used to pay back claimed expenses has sparked scandal for another senator – Mike Duffy, a former Conservative who now sits as an independent, who received $90,000 from Prime Minister Stephen Harper's then-chief of staff, Nigel Wright, to repay inappropriately claimed housing expenses. Mr. Wright resigned after the payment became public.

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